India's real estate rises to Transparent Tier in global rankings, set to attract major investments

The index, published by JLL, a real estate services company, is a benchmark for real estate market transparency that evaluates the legal and regulatory environment, enforcement mechanisms, and data availability across a wide range of geographies.

According to the index, India has made a remarkable leap forward in this year's index, reaching the transparent tier for the first time. The index highlighted that this progress is a result of institutionalisation in the commercial market and improved access to diverse real estate datasets.

India's ranking in the index is above countries like Thailand, Malaysia, and Saudi Arabia. India has moved to 31st rank under the transparent tier with a composite score of 2.44 in GRETI 2024. The top slot under the High Tier has been taken by the United Kingdom (1.24) and France (1.26). In the last index in 2022, India was ranked 36th under the semi-transparent tier in 2022.

The index stated that the improvement in the ranking of India's real estate to the transparent sector will help to attract capital inflows and boost India's standing among global investors. The index showed that globally, real estate markets with high transparency ratings garner 80 per cent of global capital flows.

"India's ascent to the transparent tier in JLL's Global Real Estate Transparency Index underscores the industry's cohesive efforts and governmental backing. This achievement is poised to attract capital inflows and boost India's standing among global investors. Markets with high transparency ratings garner 80 per cent of global capital flows. However, JLL identifies room for improvement, particularly in establishing efficient dispute resolution mechanisms," said Karan Singh Sodi, Senior Managing Director - Mumbai MMR & Gujarat, and Head - Alternatives, India, JLL.

Despite a robust regulatory evolution, the report suggests that enhancing transparency further requires collective action to democratise data access, bolster institutional participation in public markets, and commit to sustainability goals.

According to the index, Tier 1 markets (Delhi, Mumbai & Bangalore) in India have moved to the transparent tier for the first time, driven by institutionalisation, data accessibility improvements, initiative-taking financial regulation, climate risk disclosure guidelines, streamlined building regulations, and digitisation of land records. India ranks among the top ten global destinations for transaction processes and 12th for market fundamentals.

"Increasing institutional participation, along with a push for transparency, has led to the adoption of best industry practices in India's commercial real estate market. Notably, four existing REITs have driven growth in stabilised commercial assets, while standardised market valuation processes and REIT regulations have fostered market-based approaches," said Samantak Das, Chief Economist and Head - Research & REIS, India, JLL.

The index report also added regulatory enhancements such as RERA and the Insolvency and Bankruptcy Code have improved investor protection, while digital land registry records and strict monitoring by RBI and SEBI have created a robust regulatory landscape.

To improve the ranking further, the index added that the adoption of more detailed investment performance indices, enriched data coverage for alternative sectors, comprehensive information on real estate financing, accessibility of public beneficial ownership records, and intensifying commitment to ESG (Environmental, Social, and Governance), including the reporting of nature-related risks, resilient building standards, and biodiversity, and the adoption of green leases, are essential for India to move up the Transparency ratings to the next tier.

This year's index, which is the 13th edition, includes 256 individual indicators to assess market transparency across 89 countries and territories and 151 cities globally. (ANI)